Big Government

I fired up Searls.com in early 1995, and began publishing on it immediately. A lot of that writing is at a subdomain called Reality 2.0. Here is one piece from that early list, which I put up just days before Bill Gates’ famously (at the time) “declared war” on the browser market (essentially, Netscape). Interesting to look back on what happened and what didn’t. — Doc

The import of the Internet is so obvious and extreme that it actually defies valuation: witness the stock market, which values Netscape so far above that company’s real assets and earnings that its P/E ratio verges on the infinite.

Whatever we’re driving toward, it is very different from anchoring certainties that have grounded us for generations, if not for the duration of our species. It seems we are on the cusp of a new and radically different reality. Let’s call it Reality 2.0.

The label has a millenial quality, and a technical one as well. If Reality 2.0 is Reality 2.000, this month we’re in Reality 1.995.12.

With only a few revisions left before Reality 2.0 arrives, we’re in a good position to start seeing what awaits. Here are just a few of the things this writer is starting to see…

As more customers come into direct contact with suppliers, markets for suppliers will change from target populationsto conversations.

Travel, ticket, advertising and PR agencies will all find new ways to add value, or they will be subtracted from market relationships that no longer require them.

Within companies, marketing communications will change from peripheral activities to core competencies.New media will flourish on the Web, and old media will learn to live with the Web and take advantage of it.

Retail space will complement cyber space. Customer and technical service will change dramatically, as 800 numbers yield to URLs and hard copy documents yield to soft copy versions of the same thing… but in browsable, searchable forms.

Shipping services of all kinds will bloom. So will fulfillment services. So will ticket and entertainment sales services.

The web’s search engines will become the new yellow pages for the whole world. Your fingers will still do the walking, but they won’t get stained with ink. Same goes for the white pages. Also the blue ones.

The scope of the first person plural will enlarge to include the whole world. “We” may mean everybody on the globe, or any coherent group that inhabits it, regardless of location. Each of us will swing from group to group like monkeys through trees.

National borders will change from barricades and toll booths into speed bumps and welcome mats.

The game will be over for what teacher John Taylor Gatto labels “the narcotic we call television.” Also for the industrial relic of compulsory education. Both will be as dead as the mainframe business. In other words: still trucking, but not as the anchoring norms they used to be.

Big Business will become as anachronistic as Big Government, because institutional mass will lose leverage without losing inertia.Domination will fail where partnering succeeds, simply because partners with positive sums will combine to outproduce winners and losers with zero sums.

Right will make might.

And might will be mighty different.

Polyopoly

The Web is the board for a new game Phil Salin called “Polyopoly.” As Phil described it, Polyopoly is the opposite of Monopoly. The idea is not to win a fight over scarce real estate, but to create a farmer’s market for the boundless fruits of the human mind.

It’s too bad Phil didn’t live to see the web become what he (before anyone, I believe) hoped to create with AMIX: “the first efficient marketplace for information.” The result of such a marketplace, Phil said, would be polyopoly.

In Monopoly, what mattered were the three Ls of real estate: “location, location and location.”

On the web, location means almost squat.

What matters on the web are the three Cs: content, connections and convenience. These are what make your home page a door the world beats a path to when it looks for the better mouse trap that only you sell. They give your webfront estate its real value.

If commercial interests have their way with the Web, we can also add a fourth C: cost. But how high can costs go in a polyopolistic economy? Not very. Because polyopoly creates…

An economy of abundance

The goods of Polyopoly and Monopoly are as different as love and lug nuts. Information is made by minds, not factories; and it tends to make itself abundant, not scarce. Moreover, scarce information tends to be worthless information.

Information may be bankable, but traditional banking, which secures and contains scarce commodities (or their numerical representations) does not respect the nature of information.

Because information abhors scarcity. It loves to reproduce, to travel, to multiply. Its natural habitats are wires and airwaves and disks and CDs and forums and books and magazines and web pages and hot links and chats over cappuccinos at Starbucks. This nature lends itself to polyopoly.

Polyopoly’s rules are hard to figure because the economy we are building with it is still new, and our vocabulary for describing it is sparse.

This is why we march into the Information Age hobbled by industrial metaphors. The “information highway” is one example. Here we use the language of freight forwarding to describe the movement of music, love, gossip, jokes, ideas and other communicable forms of knowledge that grow and change as they move from mind to mind.

We can at least say that knowledge, even in its communicable forms, is not reducible to data. Nor is the stuff we call “intellectual property.” A song and a bank account do not propagate the same ways. But we are inclined to say they do (and should), because we describe both with the same industrial terms.

All of which is why there is no more important work in this new economy than coining the new terms we use to describe it.

The Age of Enlightenment finally arrives

The best place to start looking for help is at the dawn of the Industrial Age. Because this was when the Age of Reason began. Nobody knew more about the polyopoly game — or played it — better than those champions of reason from whose thinking our modern republics are derived: Thomas Paine, Thomas Jefferson and Benjamin Franklin.

As Jon Katz says in “The Age of Paine” (Wired, May 1995 ), Thomas Paine was the the “moral father of the Internet.” Paine said “my country is the world,” and sought as little compensation as possible for his work, because he wanted it to be inexpensive and widely read. Paine’s thinking still shapes the politics of the U.S., England and France, all of which he called home.

Thomas Jefferson wrote the first rule of Polyopoly: “He who receives an idea from me receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.”

He also left a live bomb for modern intellectual property law: “Inventions then cannot, in nature, be a subject of property.” The best look at the burning fuse is John Perry Barlow’s excellent essay “The Economy of Ideas,” in the March 1994 issue of Wired. (I see that Jon Katz repeats it in his paean to Paine. Hey, if someone puts it to song, who gets the rights?)

If Paine was the moral father of the Internet, Ben Franklin’s paternity is apparent in Silicon Valley. Today he’d fit right in, inventing hot products, surfing the Web and spreading his wit and wisdom like a Johnny Cyberseed. Hell, he even has the right haircut.

Franklin left school at 10 and was barely 15 when he ran his brother’s newspaper, writing most of its content and getting quoted all over Boston. He was a self-taught scientist and inventor while still working as a writer and publisher. He also found time to discover electricity, create the world’s first postal service, invent a heap of handy products and serve as a politician and diplomat.

Franklin’s biggest obsession was time. He scheduled and planned constantly. He even wrote his famous epitaph when he was 22, six decades before he died. “The work shall not be lost,” it reads, “for it will (as he believed) appear once more in a new and more elegant edition, revised and edited by the author.”

One feels the ghost of Franklin today, editing the web.

Time to subtract the garbage

Combine Jefferson and Franklin and you get the two magnetic poles that tug at every polyopoly player: information that only gets more abundant, and time that only gets more scarce.

As Alain Couder of Groupe Bull puts it, “we treat time as a constant in all these formulas — revolutions per minute, instructions per second — yet we experience time as something that constantly decreases.”

After all, we’re born with an unknown sum of time, and we need to spend it all before we die. The notion of “saving” it is absurd. Time can only be spent.

So: to play Polyopoly well, we need to waste as little time as possible. This is not easy in a world where the sum of information verges on the infinite.

Which is why I think Esther Dyson might be our best polyopoly player.

“There’s too much noise out there anyway,” she says in ‘Esther Dyson on DaveNet‘ (12/1/94). “The new wave is not value added, it’s garbage-subtracted.”

Here’s a measure of how much garbage she subtracts from her own life: her apartment doesn’t even have a phone.

Can she play this game, or what?

So what’s left?

I wouldn’t bother to ask Esther if she watches television, or listens to the radio. I wouldn’t ask my wife, either. To her, television is exactly what Fred Allen called it forty years ago: “chewing gum for the eyes.” Ours heats up only for natural disasters and San Jose Sharks games.

Dean Landsman, a sharp media observer from the broadcast industry, tells me that John Gresham books are cutting into time that readers would otherwise spend watching television. And that’s just the beginning of a tide that will swell as every medium’s clients weigh more carefully what they do with their time.

Which is why it won’t be long before those clients wad up their television time and stick it under their computer. “Media will eat media,” Dean says.

The computer is looking a lot hungrier than the rest of the devices out there. Next to connected computing, television is AM radio.

Fasten your seat belts.

Web of the free, home of the Huns

Think of the Industrial world — the world of Big Business and Big Government — as a modern Roman Empire.

Now think of Bill Gates as Attilla the Hun.

Because that’s exactly how Bill looks to the Romans who still see the web, and everything else in the world, as a monopoly board. No wonder Bill doesn’t have a senator in his pocket (as Mark Stahlman told us in ‘Off to the Slaughter House,’ (DaveNet, 3/14/94).

Sadly for the the Romans, their empire is inhabited almost entirely by Huns, all working away on their PCs. Most of those Huns don’t have a problem with Bill. After all, Bill does a fine job of empowering his people, and they keep electing him with their checkbooks, credit cards and purchase orders.

Which is why, when they go forth to tame the web, these tough-talking Captains of Industry and Leaders of Government look like animated mannequins in Armani Suits: clothes with no emperor. Their content is emulation. They drone about serving customers and building architectures and setting standards and being open and competing on level playing fields. But their game is still control, no matter what else they call it.

Bill may be our emperor, but ruling Huns is not the same as ruling Romans. You have to be naked as a fetus and nearly as innocent. Because polyopoly does not reward the dark tricks that used to work for industry, government and organized crime. Those tricks worked in a world where darkness had leverage, where you could fool some of the people some of the time, and that was enough.

But polyopoly is a positive-sum game. Its goods are not produced by huge industries that control the world, but by smart industries that enable the world’s inhabitants. Like the PC business that thrives on it, information grows up from individuals, not down from institutions. Its economy thrives on abundance rather than scarcity. Success goes to enablers, not controllers. And you don’t enable people by fooling them. Or by manipulating them. Or by muscling them.

In fact, you don’t even play to win. As Craig Burton of The Burton Group puts it, “the goal isn’t win/win, it’s play/play.”

This is why Bill does not “control” his Huns the way IBM controlled its Romans. Microsoft plays by winning support, where IBM won by dominating the play. Just because Microsoft now holds a controlling position does not mean that a controlling mentality got them there. What I’ve seen from IBM and Apple looks far more Monopoly-minded and controlling than anything I’ve seen from Microsoft.

Does this mean that Bill’s manners aren’t a bit Roman at times? No. Just that the support Microsoft enjoys is a lot more voluntary on the part of its customers, users and partners. It also means that Microsoft has succeeded by playing Polyopoly extremely well. When it tries to play Monopoly instead, the Huns don’t like it. Bill doesn’t need the Feds to tell him when that happens. The Huns tell him soon enough.

A market is a conversation

No matter how Roman Bill’s fantasies might become, he knows his position is hardly more substantial than a conversation. In fact, it IS a conversation.

I would bet that Microsoft is engaged in more conversations, more of the time, with more customers and partners, than any other company in the world. Like or hate their work, the company connects. I submit that this, as much as anything else, accounts for its success.

In the Industrial Age, a market was a target population. Goods rolled down a “value chain” that worked like a conveyor belt. Raw materials rolled into one end and finished products rolled out the other. Customers bought the product or didn’t, and customer feedback was limited mostly to the money it spent.

To encourage customer spending, “messages” were “targeted” at populations, through advertising, PR and other activities. The main purpose of these one-way communications was to stimulate sales. That model is obsolete. What works best to day is what Normann & Ramirez (Harvard Business Review, June/July 1993) call a “value constellation” of relationships that include customers, partners, suppliers, resellers, consultants, contractors and all kinds of people.

The Web is the star field within which constellations of companies, products and markets gather themselves. And what binds them together, in each case, are conversations.

How it all adds up

What we’re creating here is a new economy — an information economy.

Behind the marble columns of big business and big government, this new economy stands in the lobby like a big black slab. The primates who work behind those columns don’t know what this thing is, but they do know it’s important and good to own. The problem is, they can’t own it. Nobody can. Because it defies the core value in all economies based on physical goods: scarcity.

Scarcity ruled the stone hearts and metal souls of every zero-sum value system that ever worked — usually by producing equal quantities of gold and gore. And for dozens of millennia, we suffered with it. If Tribe A crushed Tribe B, it was too bad for Tribe B. Victors got the spoils.

This win/lose model has been in decline for some time. Victors who used to get spoils now just get responsibilities. Cooperation and partnership are now more productive than competition and domination. Why bomb your enemy when you can get him on the phone and do business with him? Why take sides when the members of “us” and “them” constantly change?

The hard evidence is starting to come in. A recent Wharton Impact report said, “Firms which specified their objectives as ‘beating our competitors’ or ‘gaining market share’ earned substantially lower profits over the period.” We’re reading stories about women-owned businesses doing better, on the whole, because women are better at communicating and less inclined to waste energy by playing sports and war games in their marketplaces.

From the customer’s perspective, what we call “competition” is really a form of cooperation that produces abundant choices. Markets are created by addition and multiplication, not just by subtraction and division.

In my old Mac IIci, I can see chips and components from at least 11 different companies and 8 different countries. Is this evidence of war among Apple’s suppliers? Do component vendors succeed by killing each other and limiting choices for their customers? Did Apple’s engineers say, “Gee, let’s help Hitachi kill Philips on this one?” Were they cheering for one “side” or another? The answer should be obvious.

But it isn’t, for two reasons. One is that the “Dominator Model,” as anthropologist (and holocaust survivor) Riane Eisler calls it, has been around for 20,000 years, and until recently has reliably produced spoils for victors. The other is that conflict always makes great copy. To see how seductive conflict-based thinking is, try to find a hot business story that isn’t filled with sports and war metaphors. It isn’t easy.

Bound by the language of conflict, most of us still believe that free enterprise runs on competition between “sides” driven by urges to dominate, and that the interests of those “sides” are naturally opposed.

To get to the truth here, just ask this: which has produced more — the U.S. vs. Japan, or the U.S. + Japan? One produced World War II and a lot of bad news. The other produced countless marvels — from cars to consumer electronics — on which the whole world depends.

Now ask this: which has produced more — Apple vs. Microsoft or Apple + Microsoft? One profited nobody but the lawyers, and the other gave us personal computing as we know it today.

The Plus Paradigm

What brings us to Reality 2.0 is the Plus Paradigm.

The Plus Paradigm says that our world is a positive construction, and that the best games produce positive sums for everybody. It recognizes the power of information and the value of abundance. (Think about it: the best information may have the highest power to abound, and its value may vary as the inverse of its scarcity.)

Over the last several years, mostly through discussions with client companies that are struggling with changes that invalidate long-held assumptions, I have built table of old (Reality 1.0) vs. new (Reality 2.0) paradigms. The difference between these two realities, one client remarked, is that the paradigm on the right is starting to work better than the paradigm on the left.

Paradigm

Reality 1.0

Reality 2.0

Means to ends

Domination

Partnership

Cause of progress

Competition

Collaboration

Center of interest

Personal

Social

Concept of systems

Closed

Open

Dynamic

Win/Lose

Play/Play

Roles

Victor/Victim

Partner/Ally

Primary goods

Capital

Information

Source of leverage

Monopoly

Polyopoly

Organization

Hierarchy

Flexiarchy

Roles

Victor/Victim

Server/Client

Scope of self-interest

Self/Nation

Self/World

Source of power

Might

Right

Source of value

Scarcity

Abundance

Stage of growth

Child (selfish)

Adult (social)

Reference valuables

Metal, Money

Life, Time

Purpose of boundaries

Protection

Limitation

Changes across the paradigms show up as positive “reality shifts.” The shift is from OR logic to AND logic, from Vs. to +:

Reality 1.0

Reality 2.0

man vs nature

man + nature

Labor vs management

Labor + management

Public vs private

Public + private

Men vs women

Men + women

Us vs them

Us + them

Majority vs minority

Majority + minority

Party vs party

Party + party

Urban vs rural

Urban + rural

Black vs white

Black + white

Business vs govt.

Business + govt.

The Plus Paradigm comprehends the world as a positive construction, and sees that the best games produce positive sums for everybody. It recognizes the power of information and the value of abundance. (Think about it: the best information may have the highest power to abound, and its value may vary as the inverse of its scarcity.)

For more about this whole way of thinking, see Bernie DeKoven’s ideas about “the ME/WE” at his “virtual playground.”]

This may sound sappy, but information works like love: when you give it away, you still get to keep it. And when you give it back, it grows.

Which has always been the case. But in Reality 2.0, it should become a lot more obvious.

Nobody who opposes Big Government and favors degregulation should favor the Stop Online Piracy Act, better known as SOPA, or H.R. 3261. It’s a big new can of worms that will cripple use of the Net, slow innovation on it, clog the courts with lawsuits, employ litigators in perpetuity and deliver copyright maximalists in the “content” business a hollow victory for the ages.

I also said this:

SOPA is a test for principle for members of Congress. If you wish to save the Internet, vote against it. If you wish to fight Big Government, vote against it. If you wish to protect friends in the “content” production and distribution business at extreme cost to every other business in the world, vote for it. If you care more about a few businesses you can name and nothing about all the rest of them — which will be whiplashed by the unintended consequences of a bill that limits what can be done on the Internet while not comprehending the Internet at all — vote for it.

This is the pro-business case. There are other cases, but I don’t see many people making the pure business one, so that’s why I took the business angle.

In a historic ruling on Congress’s power to give authors and composers monopoly power over their creations, the Supreme Court on Tuesday broadly upheld the national legislature’s authority to withdraw works from the public domain and put them back under a copyright shield. While the ruling at several points stressed that it was a narrow embrace of Congress’s authority simply to harmonize U.S. law with the practice of other nations, the decision’s treatment of works that had entered the public domain in the U.S. was a far more sweeping outcome.

No one, the Court said flatly, obtains any personal right under the Constitution to copy or perform a work just because it has come out from under earlier copyright protection, so no one can object if copyright is later restored. Any legal rights that exist belong only to the author or composer, the ruling said. If anyone wants to resume the use or performance of a work after it regains copyright, they must pay for the privilege, the decision made clear.

IMHO, the U.S. has become devoutly propertarian, even at the expense of opportunity to create fresh property from borrowed and remixed works in the public domain. One more way the public domain, and its friendliness to markets, is widely misunderstood.